Krause Industries' balance sheet at December 31, 2019, is presented below. KRAUSE INDUSTRIES Balance Sheet December 31, 2019 Assets Current Assets Cash $ 7,500 Accounts receivable 73,500 Finished goods Inventory ( 1.500 26,520 units) Total current assets 107,520 Property, plant, and Equipment Equipment $ 40,720 Less: Accumulated depreciation 10.550 30,170 Total assets $ 137,690 Llabilities and Stockholders' Equity Llabilities Notes payable Accounts payable $ 25,360 47,390 Total abilities 72,750 Stockholders' Equity Common stock $ 39,850 Retained earnings 25.090 Total stockholders' equity 64,940 Total abilities and stockholders' equity $ 137,690 Budgeted data for the year 2020 include the following 2020 Quarter 4 Total Sales budget [8,000 units at $32) $ 76,800 $256.000 Direct materials used 11,680 62,500 12,500 50.900 Direct labor Manufacturing overhead applied Selling and administrative expenses 10,000 48,600 17,330 75.000 To meet sales requirements and to have 2,500 units of finished goods on hand at December 31, 2020, the production budget shows 9,000 required units of output. The total unit cost of production is expected to be $ 18. Krause uses the first-in, first-out (FIFO) inventory costing method. Interest expense is expected to be $3,500 for the year. Income taxes are expected to be 40% of income before income taxes. In 2020, the company expects to declare and pay an $ 9,010 cash dividend. The company's cash budget shows an expected cash balance of $5,880 at December 31, 2020. All sales and purchases are on account. It is expected that 60% of quarterly sales are collected in cash within the quarter and the remainder is collected in the following quarter. Direct materials purchased from suppliers are paid 50% in the quarter incurred and the remainder in the following quarter. Purchases in the fourth quarter were the same as the materials used. In 2020, the company expects to purchase additional equipment costing $ 9,100. $9.422 of depreciation expense on equipment is included in the budget data and split equally between manufacturing overhead and selling and administrative expenses. Krause expects to pay $ 10,240 on the outstanding notes payable balance plus all interest due and payable to December 31 (included in interest expense $ 3,500, above). Accounts payable at December 31, 2020, includes amounts due suppliers (see above) plus other accounts payable relating to manufacturing overhead of $ 7,420. Unpaid income taxes at December 31 will be $ 6,750. (a) Your answer is partially correct. Prepare a budgeted statement of cost of goods sold. KRAUSE INDUSTRIES Budgeted Cost of Goods Sold For the Year Ending December 31, 2020 Finished Goods Inventory, 1/1/20 $ 24000 Cost of Goods Manufactured Direct Materials Used 62500 Direct Labor 50900 Manufacturing Overhead Applied 48600 162000 Cost of Goods Available For Sale 186000 Finished Goods Inventory, 12/31/20 45000 i Cost of Goods Sold 141000